BROCKER TECHNOLOGY GROUP LTD.
2150 Tower One, Scotia Place
10060 Jasper Avenue
Edmonton, Alberta
T5J 3R8
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS OF
BROCKER TECHNOLOGY GROUP LTD.
NOTICE IS HEREBY GIVEN that an Annual and Special Meeting of the Shareholders of
BROCKER TECHNOLOGY GROUP LTD. (the "Corporation") will be held at the W Hotel,
541 Lexington Avenue, New York, New York, U.S.A., on Thursday, December 7, 2000,
at the hour of 3:00 p.m. (New York time), for the following purposes:
(1) To receive the audited financial statements of the Corporation for the year
ended March 31, 2000.
(2) To elect directors for the ensuing year.
(3) To appoint auditors for the ensuing year and to authorize the directors to
fix the remuneration of the auditors.
(4) To consider and, if deemed advisable, pass a resolution to approve the
issuance by the Corporation, in one or more private placements during the
twelve month period commencing December 7, 2000, of such number of
securities that would result in the issuance or making issuable of a number
of Common Shares aggregating up to 100% of the number of outstanding Common
Shares of the Corporation as at October 30, 1999 as more particularly
described in the accompanying Information Circular.
(5) To consider and, if deemed advisable, pass a resolution approving the
Corporation's employee Share Purchase Plan, as more particularly described
in the accompanying Information Circular.
(6) To consider and, if deemed advisable, pass a special resolution to continue
the Corporation as a New Brunswick Corporation under the Business
Corporations Act (New Brunswick) and to adopt new By-laws for the
Corporation, as more particularly described in the accompanying Information
Circular.
(7) To consider and, if deemed advisable, pass a resolution to ratify and
approve the repricing of certain stock options granted to insiders of the
Corporation, as more particularly described in the accompanying Information
Circular.
(8) To transact such other business as may properly come before the Meeting.
SHAREHOLDERS OF THE CORPORATION WHO ARE UNABLE TO ATTEND THE MEETING IN PERSON
ARE REQUESTED TO DATE AND SIGN THE ACCOMPANYING INSTRUMENT OF PROXY AND TO MAIL
IT TO OR DEPOSIT IT WITH THE MONTREAL TRUST COMPANY OF CANADA, WESTERN GAS
TOWER, SUITE 710, 530 - 8TH AVENUE S.W., CALGARY, ALBERTA, T2P 3S8, ATTENTION:
CORPORATE SERVICES DIVISION. IN ORDER TO BE VALID AND ACTED UPON AT THE MEETING,
INSTRUMENTS OF PROXY MUST BE RETURNED TO THE AFORESAID ADDRESS NOT LESS THAN 24
HOURS BEFORE THE TIME SET FOR THE HOLDING OF THE MEETING OR ANY ADJOURNMENT
THEREOF.
The Board of Directors of the Corporation has set November 1, 2000, as the
record date for the meeting. Only shareholders of the Corporation of record as
at that date are entitled to receive notice of and to vote at the
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2
meeting unless after that date a shareholder of record transfers his shares and
the transferee, upon producing properly endorsed certificates evidencing such
shares or otherwise establishing that he owns such shares, requests at least ten
(10) days prior to the meeting that the transferee's name be included in the
List of Shareholders entitled to vote, in which case such transferee is entitled
to vote such shares at the meeting.
DATED at Edmonton, Alberta, this 30th day of October, 2000.
BY ORDER OF THE BOARD
Per: (Signed) "Casey O'Byrne"
-------------------------
CASEY O'BYRNE
Chairman
<PAGE>
BROCKER TECHNOLOGY GROUP LTD.
INFORMATION CIRCULAR
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, DECEMBER 7, 2000
PURPOSE OF SOLICITATION
This Information Circular is furnished in connection with the solicitation of
proxies by the Management of BROCKER TECHNOLOGY GROUP LTD. (the "Corporation" or
"Brocker") for use at the Annual and Special Meeting of the Shareholders of the
Corporation (the "Meeting") to be held at the W Hotel, 541 Lexington Avenue, New
York, New York, U.S.A., on Thursday, December 7, 2000, at the hour of 3:00 p.m.
(New York time), and at any adjournments thereof for the purposes set forth in
the accompanying Notice of Annual and Special Meeting of Shareholders.
The solicitation of proxies is made on behalf of the Management of the
Corporation. The costs incurred in the preparation and mailing of the Instrument
of Proxy, Notice of Annual and Special Meeting and this Information Circular
will be borne by the Corporation. In addition to the use of mail, proxies may be
solicited by personal interviews and telephone attendances by directors,
officers and employees of the Corporation, who will not be remunerated therefor.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the accompanying Instrument of Proxy are the directors of
the Corporation. A SHAREHOLDER WISHING TO APPOINT SOME OTHER PERSON (WHO NEED
NOT BE A SHAREHOLDER) TO REPRESENT HIM AT THE MEETING HAS THE RIGHT TO DO SO,
EITHER BY INSERTING SUCH PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE
INSTRUMENT OF PROXY OR BY COMPLETING ANOTHER INSTRUMENT OF PROXY. A proxy will
not be valid unless the completed Instrument of Proxy is deposited at the office
of the Registrar and Transfer Agent of the Corporation, The Montreal Trust
Company of Canada, Western Gas Tower, Suite 710, 530 - 8th Avenue S.W., Calgary,
Alberta, T2P 3S8, not less than 24 hours before the time fixed for the Meeting,
in default of which the Instrument of Proxy shall not be treated as valid.
A shareholder who has given a proxy may revoke it by an instrument in writing
deposited at the office of the Registrar and Transfer Agent of the Corporation,
The Montreal Trust Company of Canada, Western Gas Tower, Suite 710, 530 - 8th
Avenue S.W., Calgary, Alberta, T2P 3S8, at any time up to and including the last
business day preceding the day of the Meeting or, if adjourned, any reconvening
thereof, or with the Chairman of the Meeting on the day of the Meeting or, if
adjourned, any reconvening thereof, or in any other manner provided by law.
Where a proxy has been revoked, the shareholder may personally attend at the
Meeting and vote his shares as if no proxy had been given.
VOTING OF PROXIES
All shares represented at the Meeting by properly executed proxies will be voted
on any ballot that may be called for and, where a choice with respect to any
matter to be acted upon has been specified in the Instrument of Proxy, the
shares represented by the proxy will be voted or withheld from voting in
accordance with such specification. In the absence of any such specifications,
the management designees, if named as proxy, will vote in favour of all the
matters set out thereon.
<PAGE>
4
The accompanying Instrument of Proxy confers discretionary authority upon the
management designees or other persons named as proxy with respect to amendments
to or variations of matters identified in the Notice of Annual and Special
Meeting of Shareholders and any other matters, which may properly come before
the Meeting. At the time of printing of this Information Circular, the
management of the Corporation knows of no such amendment, variation or other
matter.
RECORD DATE
The Board of Directors of the Corporation has set November 1, 2000, as the
record date for the Meeting. Only shareholders of the Corporation of record as
at that date are entitled to receive notice of and to vote at the Meeting unless
after that date a shareholder of record transfers his shares and the transferee,
upon producing properly endorsed certificates evidencing such shares or
otherwise establishing that he owns such shares, requests at least ten (10) days
prior to the Meeting that the transferee's name be included in the List of
Shareholders entitled to vote, in which case such transferee is entitled to vote
such shares at the Meeting. In addition to the foregoing shareholders of record,
the Corporation will be providing copies of the meeting materials to
intermediaries who will be responsible for distributing such meeting materials
to beneficial shareholders who have indicated their desire to receive such
materials.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The registered holders of the Common Shares of record at the time of the Meeting
are entitled to vote such shares at the Meeting on the basis of one vote for
each Common Share held, the Common Shares being the only class of shares
entitled to vote at the Annual and Special Meeting of Shareholders. In addition,
beneficial holders of Common Shares of the Corporation who are beneficial
(unregistered) holders as of the Record Date and who have been granted voting
rights pursuant to National Policy 41 of the Canadian Securities Administrators
and complied with the said Policy will be entitled to vote at the Meeting,
subject to the provisions of the said Policy.
Of the Corporation's authorized unlimited number of Common Shares as at October
30, 2000, 19,357,045 Common Shares are issued and outstanding as fully paid and
non-assessable. The Corporation anticipates issuing 1,743,700 Common Shares
pursuant to its acquisition of Generic Technology Limited, and a maximum of
approximately 250,000 Common Shares pursuant to its acquisition of Certus
Project Consulting Limited.
To the knowledge of the directors and senior officers of the Corporation, the
shareholders beneficially owning, directly or indirectly, equity shares carrying
more than 10% of the voting rights of the outstanding equity shares of the
Corporation are as follows:
NAME AND MUNICIPALITY TYPE OF NUMBER PERCENTAGE
OF RESIDENCE OWNERSHIP OF SHARES OF 100%
------------ --------- --------- -------
Michael B. Ridgway of record 3,035,848 15.7%
Auckland, New Zealand and beneficial
As of the 30th day of October, 2000, the directors and senior officers as a
group owned beneficially, directly and indirectly, but without consideration of
outstanding stock options, 3,427,848 Common Shares of the Corporation
representing approximately 17.7% of the presently issued and outstanding Common
Shares of the Corporation.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
During the last fiscal year, the Corporation provided a loan, bearing interest
at 7.5% per annum, to the
<PAGE>
5
Corporation's President, Michael B. Ridgway of Auckland, New Zealand. The
largest amount outstanding during the last fiscal year was $167,451 (NZ) and the
balance as at October 30, 2000 was $173,748. Casey O'Byrne, Chairman and a
director of the Corporation, has an interest bearing loan with the Corporation,
bearing interest at 5% per annum. The largest amount outstanding on this loan
during the last fiscal year wa s $99,009, and the present balance is $65,733, it
is repayable by December 21, 2002. Richard Justice, the Chief Financial Officer
and a director of the Corporation, has an interest free loan from the
Corporation. The largest amount outstanding on this loan in the last fiscal year
was $283,789, and the present balance is $283,789. The Corporation has provided
a loan, bearing interest at 14% per annum, to Richard McLean, the Vice-President
of Applications Development. The largest amount outstanding on this loan during
the last fiscal year was $45,281, and the present balance is $48,460.
ELECTION OF DIRECTORS
It is proposed that the following persons will be nominated at the meeting. IT
IS THE INTENTION OF THE MANAGEMENT DESIGNEES, IF NAMED AS PROXY, TO VOTE FOR THE
ELECTION OF SAID PERSONS TO THE BOARD OF DIRECTORS UNLESS OTHERWISE DIRECTED.
Each director elected will hold office until the next Annual and Special
Meeting, or until his successor is duly elected or appointed, unless his office
be earlier vacated in accordance with the Business Corporations Act (Alberta).
The following information relating to the nominees as directors is based partly
on the Corporation's records and partly on information received by the
Corporation from the said nominees and sets forth the name and address of each
of the persons proposed to be nominated for election as a director, his
principal occupation at present and for the previous five years, all other
positions and offices in the Corporation held by him, the year in which he was
first elected a director, and the approximate number of shares of the
Corporation that he has advised the Corporation are beneficially owned by him,
directly or indirectly.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
SHARES BENEFICIALLY
POSITION HELD AS OF
PRESENTLY OCTOBER 30,
DIRECTOR HELD 2000(1) PRINCIPAL OCCUPATION
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michael B. Ridgway President, and 3,035,848 Common President and Chief Executive
Auckland, New director (since Shares Officer, Brocker Technology
Zealand December 20, Group Ltd. and Brocker
1994) Technology Group (NZ) Limited.
----------------------------------------------------------------------------------------------
Casey J. O'Byrne Chairman and 201,790 Common Barrister & Solicitor,
Edmonton, Alberta Director Shares Tarrabain, O'Byrne & Company
(director since
November 23,
1993)
----------------------------------------------------------------------------------------------
Richard Justice Chief Financial 369,500 Common Chief Financial Officer and
Auckland, New Officer, Chief Shares Chief Operating Officer, Brocker
Zealand Operating Technology Group Ltd.; prior
Officer and thereto, financial controller
Director Sealcorp Computer Products Ltd.;
(director since and prior thereto,
September 12, Manager/Consultant, Abacus
1997) Management Services Limited
----------------------------------------------------------------------------------------------
Daniel Hachey Director (since 22,000 Common Shares Senior Vice-President and
Toronto, Ontario January 26, 1998) Director, Head of Technology
Group, Corporate Finance and
Advisory Division, HSBC
Securities (Canada) Inc.
----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
6
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Julia Clarkson Director (since Nil Director of Revenue, Imagitas,
Boston, October 23, 1998) Inc.; and prior thereto Director
Massachusetts of Marketing Zoots - The Cleaner
Cleaner.
----------------------------------------------------------------------------------------------
Andrew J. Director (since 500 Common Shares Barrister & Solicitor,
Chamberlain December 15, Chamberlain Hutchison
Edmonton, Alberta 1999)
----------------------------------------------------------------------------------------------
Robert W. Singer Director (since Nil Vice-President of Corporate
Lakewood, New August 21, 2000) Relations of Community / Kimball
Jersey Medical Centre, and Assistant
Majority Leader, New Jersey
State Senate.
----------------------------------------------------------------------------------------------
Minister for Finance, Fiji
James Ah Koy Not presently a Nil(2) Islands; prior thereto, Minister
Tamavua, Suvo, director for Commerce, Industry, Trade
Fiji Islands and Public Enterprises.
----------------------------------------------------------------------------------------------
</TABLE>
(1) Does not include options to acquire shares.
(2) Mr. Ah Koy is the founder and a principal of Kelton Investments Limited,
which company is to be issued 724,724 Common Shares pursuant to the
Corporation's acquisition of Generic Technology Limited.
The Corporation is required to have an audit committee, which is presently
comprised of Casey J. O'Byrne, Daniel Hachey and Julia Clarkson. The Corporation
does not have an executive committee.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the total compensation
paid by the Corporation and its subsidiaries to the Corporation's President for
the financial years ended March 31, 1998 and March 31, 1999 and March 31, 2000
and for the four most highly compensated executive officers (other than the
President) for the financial year ended March 31, 1999 and March 31, 2000
(except where the aggregate salary and bonus did not exceed $100,000). No other
executive officers had aggregate salary and bonuses in excess of $100,000 during
the financial year ended March 31, 1998. Aspects of this compensation are dealt
with in the following table:
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7
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------------- --------------
Name and Salary ($) Bonus Other Annual Number of All Other
Principal ($) Compensation Securities Compensation
Position ($)(1) Under Option
------------------------ -------- ----------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael B 1998 $143,625 Nil $ 6,878 30,000 Nil
Ridgway,
President 1999 $126,976 Nil $ 33,072 30,000 Nil
2000 $ 41,411 Nil $ 7,309 230,000 $41,834
-------------------------------------------------------------------------------------------------------
Richard Justice, Chief 1999 $100,254 Nil $ 18,869 Nil Nil
Financial Officer and
Chief Operating Officer 2000 $100,617 Nil $ 18,156 118,000 Nil
-------------------------------------------------------------------------------------------------------
Chris Spring, General 1999 $114,342 Nil Nil 50,000 Nil
Manager, Brocker
Australia 2000 $132,206 Nil $ 19,816 81,000 Nil
-------------------------------------------------------------------------------------------------------
David Cooke, Director, 1999 $108,496 Nil Nil Nil Nil
Pritech Corporation
2000 $105,413 Nil $ 32,522 Nil Nil
-------------------------------------------------------------------------------------------------------
Richard Preston, 2000 $ 88,524 Nil $ 14,154 15,000 Nil
National Sales and
Marketing Manager,
Sealcorp Australia
-------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) Includes taxable value of options exercised and taxable value of company
vehicle use. Except as stated perquisites and other personal benefits do
not exceed the lesser of $50,000 and 10% of the total annual salary and
bonus.
(2) The aggregate cash compensation paid to the President and the Corporation's
other four most highly compensated executive officers (its "named executive
officers") by the Corporation and its subsidiaries for the year ended March
31, 2000 was $468,171.
Option Grants for the Fiscal Year Ended March 31, 2000
The directors and senior officers of the Corporation were granted stock options
for the purchase of Common Shares pursuant to the terms of the stock option plan
of the Corporation during the fiscal year ended March 31, 2000. The Corporation
has not granted any share appreciation rights. The following table sets forth
certain information relating to the stock options granted to the directors
during the financial year ended March 31, 2000:
<PAGE>
8
<TABLE>
<CAPTION>
Option Grants During the Most Recently Completed Financial Year
-----------------------------------------------------------------------------------------------
% of Total Market Value
Options Granted/ of Shares
Repriced to Underlying
Securities Employees in the Options at
Under Financial Year Exercise Date of Grant/
Options Ended March Price Repricing
Name (shares) 31, 2000(1) ($/share) ($/Share) Expiration Date
---------------- ------------ ----------------- ----------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Richard Justice 118,000 16.9% $1.41 $1.41 July 2, 2004
-----------------------------------------------------------------------------------------------
Chris Spring 31,000 4.5% $1.41 $1.41 July 2, 2004
-----------------------------------------------------------------------------------------------
Michael Ridgway 200,000 28.7% $7.40(2) $3.25 February 29, 2005
-----------------------------------------------------------------------------------------------
Casey O'Byrne 100,000 14.4% $7.40(2) $3.25 February 29, 2005
-----------------------------------------------------------------------------------------------
Andrew 50,000 7.2% $7.40(2) $3.25 February 29, 2005
Chamberlain
-----------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) During the fiscal year ended March 31, 2000, the Corporation granted
options to acquire shares for an aggregate of 696,000 Common Shares.
(2) These options were originally granted with an exercise price of $11.25 per
share. On the date of grant (February 29, 2000) the market value of the
shares was $11.25. They were re-priced to their current exercise price on
Oct. 10, 2000.
Value of Aggregated Options Exercised During the Fiscal Year Ended March 31,
2000 and Financial Year End Option Values
The following table sets forth certain information relating to options exercised
by named executive officers and directors of the Corporation during the
financial year ended March 31, 2000 and the number and accrued value of
unexercised stock options as at March 31, 2000:
<PAGE>
9
Aggregated Option Exercises During the Year Ended March 31, 2000 and Option
Values at March 31, 2000.
Value of
Unexercised
Unexercised In-The-Money
Shares Aggregate Options at Options at
Acquired on Value March 31, March 31,
Name Exercise (#) Realized ($) 2000(1) (#) 2000(2) ($)
------------------- --------------- --------------- --------------- ------------
Michael B. Ridgway Nil Nil 230,000 $ 395,500
--------------------------------------------------------------------------------
Richard Justice Nil Nil 118,000 $1,220,120
--------------------------------------------------------------------------------
Casey J. O'Byrne 5,000 $ 37,100 302,000 $2,177,730
--------------------------------------------------------------------------------
Daniel Hachey 50,000 $ 350,500 Nil Nil
--------------------------------------------------------------------------------
Julia Clarkson Nil Nil 50,000 $ 512,500
--------------------------------------------------------------------------------
Chris Spring Nil Nil 81,000 $ 813,040
--------------------------------------------------------------------------------
Richard Preston Nil Nil 15,000 $ 158,500
--------------------------------------------------------------------------------
Andrew Chamberlain Nil Nil 50,000 $ 25,000
--------------------------------------------------------------------------------
Paul Stein 50,000 $ 15,000 Nil Nil
--------------------------------------------------------------------------------
Notes:
(1) All options shown are exercisable.
(2) The value of unexercised in-the-money stock options has been determined by
subtracting the exercise price of the option as at March 31,2000 from the
closing Common Share price of $11.75 on March 31, 2000 as quoted by The
Toronto Stock Exchange, and multiplying that number by the number of Common
Shares that may be acquired upon the exercise of the option.
The Corporation does not have a long term incentive plan established for the
benefit of its named executive officers or directors.
Compensation of Directors
No cash remuneration was paid to the non-executive directors of the Corporation,
in their capacities as directors, during the financial year ended March 31,
2000, other than reimbursement of expenses incurred in connection with their
duties as directors. The Chairman, Casey O'Byrne, is paid fees of $21,400 per
annum, applied to Mr. O'Byrne's loan from the Corporation. Compensation is
payable to Daniel Hachey and Julia Clarkson on the basis of $1,000 per meeting
for Board meetings and $500 per meeting for committee meetings. The Corporation
has agreed to pay Robert W. Singer fees of $70,417 per year. Directors were
granted options to acquire shares, the details of which are set out in the
tables above.
Compensation of Executive Officers
The aggregate cash compensation paid by the Corporation for services rendered by
its named executive officers during the last completed financial year was
$468,171. The aggregate value of all other compensation paid to these five
executive officers of the Corporation during its fiscal year ended March 31,
2000 did not exceed 10% of the aggregate cash compensation of the executive
officers as a group.
Stock Option Plan
The Corporation has established a Stock Option Plan (the "Plan") pursuant to
which the Board of Directors of the Corporation may grant options to purchase
Common Shares to the officers, directors and employees of the Corporation or
affiliated corporations and to consultants retained by the Corporation.
The aggregate number of Common Shares reserved for issuance under the Plan is
set at a maximum of 2,800,000 Common Shares (being approximately 14.5% of the
presently issued and outstanding shares of the Corporation). There are presently
options outstanding for an aggregate of 1,998,000 Common Shares. An
<PAGE>
10
aggregate of 127,000 Common shares were issued pursuant to duly exercised stock
options during the fiscal year ended March 31, 2000. The aggregate number of
Common Shares issuable to any one person shall not exceed 5% of the total number
of issued and outstanding Common Shares and the aggregate number of Common
Shares issuable to insiders as a group shall not exceed 10% of the total number
of issued and outstanding Common Shares. The period during which an option
granted under the Plan is exercisable may not exceed ten years from the date
such option is granted. The price at which Common Shares may be acquired upon
the exercise of an option may not be less than the closing price of the Common
Shares, on the last business day prior to the date the option was granted,
traded on The Toronto Stock Exchange.
Options granted under the Plan are non-assignable and are subject to early
termination in the event of the death of a participant or in the event a
participant ceases to be an officer, director, employee, or consultant of the
Corporation, or a subsidiary, as the case may be.
Subject to the foregoing restrictions, and certain other restrictions set forth
in the Plan, the Board of Directors of the Corporation is authorized to provide
for the granting of options and the exercise and method of exercise of options
granted under the Plan.
Composition of the Compensation Committee
The Corporation has a Compensation Committee, which, during the most recent
fiscal year was, and at present is, composed of Casey O'Byrne, Daniel Hachey and
Julia Clarkson. Mr. O'Byrne is also the Chairman of the Corporation. Mr. O'Byrne
has been provided with an interest bearing loan by the Corporation (see
"Indebtedness of Directors and Officers").
Report on Executive Compensation
The Compensation Committee reviews and makes recommendations to the Board of
Directors respecting the compensation of the Chief Executive Officer, Chief
Financial Officer, and other senior officers of the Corporation including
salaries, bonuses and stock options. To date, executive compensation has been
comprised primarily of base salary and stock options. Base salaries of executive
officers are reviewed annually based upon a number of factors including
competitive salaries, experience, individual performance and level of
responsibility. The award of stock options is considered to be an important
element of the Corporation's compensation policies as they provide a reward and
incentive for enhancing shareholder value. When determining new grants of
options, other elements of compensation, including existing options, are taken
into account.
Most of the Corporation's senior officers have performance based compensation
arrangements. These compensation arrangements include a variable portion based
upon the profitability of either the corporate group as a whole or a particular
entity, depending upon the position of the executive. For the fiscal year ended
March 31, 2000, some of the budget objectives were not achieved and the variable
portion of compensation was reduced accordingly.
The compensation for Michael Ridgway, the Chief Executive Officer, for the most
recently completed fiscal year was based primarily upon maintaining existing
levels of compensation in light of continued corporate growth and development,
including growth and revenues and corporate development through expansion and
acquisitions.
This report on executive compensation is presented by the Corporation's
Compensation Committee, being comprised of Casey O'Byrne, Daniel Hachey and
Julia Clarkson.
<PAGE>
11
Performance Graph
The following graph compares the yearly change in the Corporation's cumulative
total shareholder return on its Common Shares with the cumulative total
shareholder return on the Toronto Stock Exchange 300 Index, based upon a $100
investment, assuming the re-investment of dividends where applicable, for the
comparable period.
[PERFORMANCE GRAPH]
(1) Date of listing on Alberta Stock Exchange, Shareholder value used as at
this date is $0.10 per share, being the initial public offering price.
STATEMENT OF CORPORATE GOVERNANCE PRINCIPLES
The Toronto Stock Exchange (the "TSE") has a policy for listed companies
pertaining to corporate governance. This policy adopts the TSE Committee on
Corporate Governance in Canada's Report which sets out a series of guidelines
for effective corporate governance (the "Report"). The TSE requires that each
listed company disclose on an annual basis its approach to corporate governance.
Brocker's approach to corporate governance is set forth below.
1. The mandate of the Board of Directors is to supervise the management of the
business and affairs of Brocker and the Board implicitly assumes
responsibility for the stewardship of the Corporation. Although the
Corporation has a written strategic plan and the Board meets and discusses
the future goals of the Corporation. Based on information provided and
procedures established by management, the Board from time to time has
considered the principal risks of the Corporation's business and reviewed
the procedures to manage these risks. The Board has considered and will
continue to consider, succession issues and takes responsibility for
monitoring the Chief Executive Officer ("CEO") of the Corporation who in
turn is responsible for the appointing, training and monitoring of other
senior management. The Board has discussed and considered how the
Corporation communicates with its shareholders, and senior management of
the Corporation promptly deals with received shareholder concerns and
queries. The CEO and Chief Financial Officer assess the integrity of the
Corporation's internal control and management information systems and
report to the Board as required. The Board is of the opinion that given
consideration to the size of the Corporation and the expertise of the CEO
and other senior management of the Corporation, the foregoing is an
appropriate
<PAGE>
12
role for the Board.
2. The Board is presently comprised of seven members, four of which (namely
Mr. O'Byrne, Mr. Hachey, Ms. Clarkson and Robert Singer) are unrelated, in
that they are independent of management of the Corporation and are free of
any interest and any business or other relationship which could, or could
reasonably be perceived to materially interfere with his ability to act in
the best interest of the Corporation. Mr. Ridgway is related in that he is
the Chief Executive Officer of the Corporation; Mr. Justice is the Chief
Financial Officer; and Mr. Chamberlain is a member of a law firm that
provides services to the Corporation. The Corporation does not have a
significant shareholder as defined in the Report.
3. Each of the unrelated directors is also an outside director in that neither
is part of the management of the Corporation.
4. The Board deals directly with the issue of the nomination of new directors.
The Boards feels this is appropriate given the size of the current Board of
Directors. Normally, nominations have been the result of recruitment
activities of members of the Board and discussed informally with members of
the Board before being formally brought to the Board as a whole.
5. Given the size of the Corporation's Board, it does not have a committee to
assess the effectiveness of the Board as a whole, its committees and
individual directors. Such assessment is done informally by discussion
among individual Board members.
6. The Corporation does not have a formal process of orientation and education
program for new recruits to the Board.
7. The Board has examined its size with respect to the issue of its
effectiveness and has determined that its present size is adequate, given
the size of the Corporation and the nature of its business.
8. The Board has three committees, being the Audit Committee, Compensation
Committee and the Corporate Governance Committee. The members of these
committees are unrelated and outside directors.
9. The Board has a Compensation Committee which is comprised of three members,
all of which are unrelated and outside directors.
10. The Board has a Corporate Governance Committee which is, in general,
responsible for developing the Corporation's approach to corporate
governance. At present, the committee is comprised of two members, which
are unrelated and outside directors.
11. The Board periodically reviews the performance of the CEO but does not have
formal position descriptions for the Board and the CEO, nor does it have
written corporate objectives which the CEO is responsible for meeting.
However, the Board has financial and corporate objectives, and reviews the
performance of the CEO in view of the attainment of these financial and
corporate objectives and the enhancement of shareholder value.
12. The Board operates closely with management; however, when required, the
Board functions independent of management in that it considers and
generally, but does not always, accept management's proposals.
13. The Audit Committee is comprised of a majority of outside directors and is
responsible for reviewing the audited financial statements of the
Corporation. It is in a position, and if required it can have, direct
<PAGE>
13
communication with the Corporation's external auditors. The Board has
established the roles and responsibilities of the Audit Committee.
14. Individual directors have the ability to engage outside advisors at the
expense of the Corporation in appropriate circumstances.
APPOINTMENT OF AUDITORS
The shareholders will be asked to vote for the appointment of Deloitte Touche
Tohmatsu, Chartered Accountants, Auckland, New Zealand, as auditors of the
Corporation and to authorize the directors to fix the remuneration of the
auditors. KPMG, Chartered Accountants, are the present auditors of the
Corporation and were appointed on June 3, 1996.
ADVANCE SHAREHOLDER APPROVAL FOR THE ISSUANCE OF SHARES BY PRIVATE PLACEMENT
The Corporation from time to time investigates opportunities to raise financing
on advantageous terms. It anticipates that it may undertake one or more
financings over the next year and expects some of them to be structured as
private placements. In addition, the Corporation may negotiate possible
acquisitions of assets or businesses in exchange, in whole or in part, for the
issuance of Common Shares or convertible securities of the Corporation; such
transactions would also be considered to be private placements.
Under the rules of the Toronto Stock Exchange the aggregate number of shares of
a listed company which are issued or made subject to issuance (i.e. issuable
under a share purchase warrant or option or other convertible security) by way
of one or more private placement transactions during any particular six month
period must not exceed 25% of the number of shares outstanding (on a non-diluted
basis) prior to giving effect to such transactions (the "TSE 25% Rule"), unless
there has been shareholder approval of such transactions.
The application of the TSE 25% Rule may restrict the availability to the
Corporation of funds which it may wish to raise in the future by private
placements of its securities or potential acquisitions.
In particular, management of the Corporation considers it to be in the best
interests of the Corporation to solicit private placement funds for working
capital and possible expansions or acquisitions. The Toronto Stock Exchange has
a working practice that it will accept advance approval by shareholders in
anticipation of private placements that may exceed the TSE 25% Rule, provided
such private placements are completed within 12 months of the date such advance
shareholder approval is given.
The Corporation's issued and outstanding share capital is currently 19,357,045
Common Shares and the Corporation proposes that the maximum number of shares
which either would be issued or made subject to issuance under one or more
private placements in the twelve month period commencing on December 7, 2000
would not exceed 19,357,045 shares or 100% of the Corporation's issued and
outstanding shares as at October 30, 2000.
Any private placement proceeded with by the Corporation under the advance
approval being sought at the Meeting will be subject to the following additional
restrictions:
(a) it must be substantially with parties at arm's length to the Corporation;
(b) it cannot materially affect control the Corporation;
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14
(c) it must be completed within a twelve month period following the date the
advance shareholder approval is given; and
(d) it must comply with the private placement pricing rules of The Toronto
Stock Exchange which currently require that the issue price per Common
Share must not be lower than the closing market price of the Common Shares
on The Toronto Stock Exchange on the trading day prior to the date notice
of the private placement is given to The Toronto Stock Exchange (the
"Market Price"), less the applicable discount, as follows:
Market Price Maximum Discount
$0.50 or less 25%
$0.51 to $2.00 20%
above $2.00 15%
(For these purposes, a private placement of unlisted convertible securities
is deemed to be a private placement of the underlying listed securities at
an issue price equal to the lowest possible price at which the securities
are convertible by the holders thereof).
In any event, The Toronto Stock Exchange retains the discretion to decide
whether or not a particular placement is "substantially" at arm's length or will
materially affect control of the Corporation, in which case specific shareholder
approval may be required.
In anticipation that the Corporation may wish to enter into one or more private
placements in the next 12 months that will result in it issuing and/or making
issuable such number of its Common Shares, taking into account any shares that
may be issued upon exercise of any warrants, options or other rights granted in
connection with the private placements, that will exceed the TSE 25% Rule, the
Corporation requests its shareholder to pass an ordinary resolution in the
following terms:
"BE IT RESOLVED THAT:
The issuance by the Corporation in one or more private placements during the
twelve month period commencing December 7, 2000 of such number of securities
that would result in the Corporation issuing or making issuable a number of
Common Shares aggregating up to 100% of the number of issued and outstanding
Common Shares as at October 30, 2000, being the date of the Information Circular
describing the advance approval, as more particularly described in and subject
to the restrictions described in the Corporation's Information Circular dated
October 30, 2000, is hereby approved."
The directors of the Corporation believe the passing of the ordinary resolution
is in the best interests of the Corporation and recommend that shareholders vote
in favor of the resolution. In the event the resolution is not passed, The
Toronto Stock Exchange will not approve any private placements that result in
the issuance or possible issuance of a number of shares which exceed the TSE 25%
Rule, without specific shareholder approval. Such restriction could impede the
Corporation's timely access to required funds on favorable terms.
An ordinary resolution requires the approval of a simple majority of the votes
cast by those shareholders of the Corporation who, being entitled to do so, vote
in person or by proxy at a general meeting of the Corporation.
APPROVAL OF EMPLOYEE SHARE PURCHASE PLAN
Subject to receipt of shareholder approval, the Corporation proposes to
establish an Employee Share Purchase
<PAGE>
15
Plan (the "Share Purchase Plan") pursuant to which it will reserve an aggregate
of 1,500,000 Common Shares (being approximately 7.75% of the presently issued
and outstanding shares of the Corporation). The purpose of the Share Purchase
Plan is to make available to eligible employees of the Corporation and its
subsidiaries a means of purchasing the Corporation's Common Shares through
regular payroll deductions. Participation in the Share Purchase Plan is
voluntary. The major terms of the Share Purchase Plan are set out below.
Montreal Trust Company of Canada (the "Administrator"), which is the Transfer
Agent and Registrar of the Corporation, has been designated by the Corporation
to act as the Administrator of the Share Purchase Plan and to open and maintain
accounts in the names of the participating employees and to arrange for
purchases of shares. The Corporation may, in its discretion, change the
Administrator or may appoint itself to act as Administrator of the Share
Purchase Plan.
All full time salaried employees of the Corporation (except for those holding a
position equal to or senior to that of "Group General Manager"), who are
schedule to work at least 35 hours a week, are over the age of 16 years, and
have completed at least 6 months of continuous service, are eligible to
participate in the Share Purchase Plan. Eligible employees may elect to enroll
in the Share Purchase Plan as of January 1, April 1, July 1 or October 1, in any
year, by delivering to the Corporation appropriate election forms at least 30
days prior to the enrolment date. Each participant must notify the Corporation
of what percentage, being a minimum of 2.5% and a maximum of 5%, of his monthly
salary he wishes to contribute to the Share Purchase Plan. These contributions
are then deducted from the employee's salary on a semi-monthly basis and are
matched equally by the Corporation. The matching contribution by the Corporation
vests immediately. All contributions are forwarded to the Plan Administrator on
a monthly basis. The participant may change the designated percentage of payroll
deduction on 30 days notice, and may withdraw from the Share Purchase Plan at
any time.
The total amount of contributions is used on a monthly basis to purchase Common
Shares of the Corporation from its treasury. The Purchase Price of such shares
is that price which is equal to the weighted average of the trading prices of
the Common Shares of the Corporation on the Toronto Stock Exchange for the 5
days on which the shares traded on or before the last day of the month for which
contributions were remitted to the Administrator. Participants whose
contributions were remitted will immediately acquire full beneficial ownership
of all shares and fractional interest in shares subscribed for their accounts.
All shares will be registered in the name of the Administrator until delivery to
the participants, which will occur when an employee withdraws from the Share
Purchase Plan or on the request of the employee (subject to payment of the
Administrator's fees).
The Corporation will pay all costs of establishing and operating the Share
Purchase Plan. The Plan will be monitored by a committee to be appointed by the
Board of Directors of the Corporation, which is empowered to make and enforce
rules with respect to interpretation resolved ambiguities, and amend or
terminate the Share Purchase Plan and decide questions of eligibility.
A participant may withdraw from the Share Purchase Plan at any time, in
accordance with the provisions of the Plan. The participants may not sell or
transfer their shares until they are in receipt of a certificate for the shares
purchased for them. The Corporation may amend or terminate the Share Purchase
Plan at any time.
No shares shall be purchased by the Administrator for any participant, for such
purchase could result at any time in:
1. The number of shares reserved for issuance pursuant to stock options
granted to, or shares purchased under the Share Purchase Plan for, insiders
of the Corporation exceeding 10% of the issued and outstanding shares of
the Corporation.
2. The issuance to any one insider, and such insiders associates, within a 1
year period, of a number of
<PAGE>
16
shares exceeding 5% of the issued and outstanding shares of the
Corporation.
The reservation of 1,500,000 Common Shares for the Share Purchase Plan is
anticipated to allow the operation of the Share Purchase Plan for approximately
5 years. However, the number of shares that may be purchased under the Share
Purchase Plan in any given year can vary significantly, based upon a number of
factors including levels of employee compensation, level of participation by
employees, fluctuation in foreign currency exchange rates (at the present time a
majority of the Corporation's employees are in New Zealand and Australia) and
fluctuations in the trading price of the Corporation's shares. Except for the
matching contribution by the Corporation, no additional financial assistance
will be provided by the Corporation under the Share Purchase Plan.
A complete copy of the Share Purchase Plan will be tabled at the Meeting, and
prior thereto will be available for inspection at the Corporation's registered
office, 1310 Merrill Lynch Tower, 10205 - 101 Street, Edmonton, Alberta, T5J
2Z2, during normal business hours.
The terms of the Share Purchase Plan require approval of the shareholders by way
of ordinary resolution, being an affirmative vote by the majority of shareholder
who vote in person or by proxy in respect of the resolution. Management of the
Corporation believes that the Share Purchase Plan is consistent with competitive
compensation arrangements and is necessary to attract, retain and motivate
quality employees. Accordingly, management of the Corporation recommends that
shareholders vote in favor of the resolution approving the Share Purchase Plan.
APPROVAL OF REPRICING OF OPTIONS
Effective October 10, 2000, the Corporation amended the exercise price of
certain options previously granted to certain directors and officers, the
particulars are set out below. On February 29, 2000, the Corporation granted an
aggregate of 350,000 options under its Stock Option Plan, having an exercise
price of $11.25 per share, being the prevailing market price at that time. These
options were granted to the following persons: Michael Ridgway, 200,000; Casey
O'Byrne, 100,000; Andrew Chamberlain, 50,000. Since that date there has been a
significant reduction in the trading price of the Corporation's shares (on
October 10, 2000, the last closing price of the Common Shares on the Toronto
Stock Exchange was $3.25). Accordingly, the Corporation has re-priced these
options to have an exercise price of $7.40 per share. This price was selected as
being the most recent price at which options were granted under the Stock Option
Plan.
The rules of the Toronto Stock Exchange provide that a re-pricing of existing
stock options granted to an insider requires approval of the shareholders of the
Corporation. Such approval must be by way of a majority of votes cast in respect
to the resolution, excluding votes attached to securities beneficially held by
the optionees.
APPROVAL OF CONTINUANCE AND BY-LAWS
Shareholders will be asked to consider and, if deemed advisable, pass a special
resolution to approve the continuance of the Corporation as a New Brunswick
Corporation under the Business Corporations Act (New Brunswick) (the "New
Brunswick Act"). At the present time the Corporation is an Alberta Corporation,
incorporated under the provisions of the Business Corporations Act (Alberta)
(the "Alberta Act"). The Alberta Act requires that a majority of the directors
of an Alberta Corporation must be resident Canadians, unless less than 5% of the
gross revenues of the Corporation (on a consolidated basis) are earned in Canada
(which is presently the case), in which case at least one-third (1/3) of the
directors of the Corporation must be resident Canadians. The New Brunswick Act
does not impose residency requirements on the Board of Directors. Given the
nature and location of the Corporation's operations and business activities,
management of the
<PAGE>
17
Corporation considers that it may be a benefit to the Corporation to have a
Board of Directors on which Canadian residents represents a minority, or less
than one-third (1/3), of the directors. As a result, it is proposed to continue
the Corporation under the New Brunswick Act in order to provide the greatest
flexibility in the appointment and election of directors.
The New Brunswick Act and the Alberta Act generally provide the same level of
protection to shareholders of corporations. The New Brunswick Act contains
derivative action, oppression, and dissent and appraisal rights similar to those
prescribed by the Alberta Act. However, there are a number of differences
between the New Brunswick Act and the Alberta Act which will result in various
changes to the rights of shareholders of the Corporation following its
continuance under the New Brunswick Act. The following is a summary of the
significant differences between the New Brunswick Act and Alberta Act as they
may be regarded as affecting the rights of shareholders of the Corporation. The
following summary is not exhaustive of all differences between the New Brunswick
Act and the Alberta Act. The following is a summary only and does not purport to
be a comprehensive statement of the particulars of the actual statutory
provisions to which reference is made.
Residency Requirements
There is no requirement under the New Brunswick Act that directors be residents
or citizens of Canada. As described above, the Alberta Act imposes certain
residency requirements on the directors of the Corporation.
Cumulative Voting
The Alberta Act permits, but does not require, cumulative voting rights in the
election of directors. At present the Articles of the Corporation do not provide
for cumulative voting. Under the New Brunswick Act shareholders have cumulative
voting rights in the election of directors. Cumulative voting rights permit each
shareholder entitled to vote at a meeting of shareholder to cast, in a vote for
the election of directors, a number of votes equal to the number of votes
attached to the shares held by the shareholder multiplied by the number of
directors to be elected. The shareholder is entitled to cast such votes in favor
of one director nominee or to distribute them among the nominees in any manner.
Appointment of Directors
Where it is authorized by the Articles of the Corporation, the Alberta Act
permits the directors of the Corporation to appoint additional directors between
annual general meetings provided that the number of additional directors does
not exceed one-third (1/3) of the number of directors who held office of the
close of the last annual general meeting. The Alberta Act also permits the
Articles of a corporation to permit directors to be elected for a term expiring
not later than the third annual meeting following their election. The Articles
of the Corporation contain provisions permitting the appointment of additional
directors between annual general meetings and the election of directors for
extended terms, as described above. The New Brunswick Act does not allow a
corporation to include such provisions in its Articles. As a result, the
proposed Articles of Continuance do not include such provisions.
Place of Meeting of Shareholders
Under the Alberta Act meetings of shareholders are to be held at the place
within Alberta provided for in the By-laws, or in the absence of such provision
at the place within Alberta that the directors determine, unless the Articles of
the Corporation provide otherwise. The Corporation's Articles permit shareholder
meetings to be held at any place either within or outside Alberta. The New
Brunswick Act provides that shareholder meetings are to be held within New
Brunswick, unless the Articles of the corporation provide otherwise. The
proposed Articles of Continuance will permit shareholder meetings to be held at
any place either within or outside New Brunswick.
<PAGE>
18
Auditors and Financial Statements
The Alberta Act requires the Corporation to have auditors (unless all
shareholders consent otherwise), and to provide the shareholders with audited
financial statements. The Alberta Act also requires the Corporation to have an
audit committee. The New Brunswick Act does not require a corporation to appoint
an auditor or that financial statements be subject to audit. Further, under the
New Brunswick Act financial statements can be prepared in accordance with
generally accepted accounting principles applicable in non-Canadian
jurisdictions. In addition, the New Brunswick Act does not require the
appointment of an audit committee. However, notwithstanding its continuance
under the New Brunswick Act, the Corporation will continue to be subject to
applicable Securities Laws and Stock Exchange rules. At the present time the
Corporation is a reporting issuer under the Securities Acts of Alberta, British
Columbia and Ontario, and is listed on the Toronto Stock Exchange and Nasdaq.
These Securities Laws and Stock Exchange rules provide for comprehensive
financial reporting and audit requirements, including preparation and delivery
of audited financial statements in accordance with Canadian generally accounting
principles, and the appointment of an audit committee. Accordingly, this
difference between the New Brunswick Act and the Alberta Act will not have an
impact upon the financial statement and audit requirements currently imposed
upon the Corporation by the applicable Securities Laws and Stock Exchange rules.
Share Capital
The Alberta Act does not permit share capital to be specified as having a par
value. The New Brunswick Act permits share capital to be specified as having
either a par value or no par value. However, the Articles of Continuance
proposed for the Corporation provide for only no par value shares.
Pre-emptive Rights
The New Brunswick Act provides shareholders with pre-emptive rights in respect
to the issuance of certain securities of a corporation, unless the Articles of
Incorporation provide otherwise. Under the Alberta Act the granting of
pre-emptive rights is permissive rather than mandatory; at the present time the
Articles of the Corporation do not provide for pre-emptive rights. The proposed
Articles of Continuance specifically provide that pre-emptive rights will not be
available to shareholders of the Corporation, which is consistent with the
present position.
Takeover Bid Rules
The Alberta Act does not prescribe rules and requirements for takeover bids.
However, the Securities Laws to which the Corporation is subject contain
comprehensive takeover bid rules. In general, these rules provide that where any
person or company makes an offer to acquire shares of a Corporation which would
result in such person or company holding 20% or more of the outstanding shares
of the Corporation must, subject to certain exceptions, make an identical offer
to all shareholders of the Corporation, in accordance with the rules set out
under the applicable Securities Laws. The New Brunswick Act provides takeover
rules similar to those provided by the applicable Securities Laws, except that
the corresponding percentage for a takeover bid under the New Brunswick Act is
50%. In addition, the New Brunswick Act does not contain a number of the
exceptions that are contained in the Securities Laws. The Corporation shall
remain subject to the provisions of the Securities Laws, including the 20%
threshold for takeover bids.
Financial Assistance
The Alberta Act prohibits a corporation from providing financial assistance to
certain persons and related corporations unless the corporation can meet
prescribed solvency tests. This restriction cannot be removed by the Articles of
the corporation. Under the New Brunswick Act the Articles of a corporation can
permit such financial assistance notwithstanding the corporation meeting or not
meeting such solvency tests. The proposed
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19
Articles of Continuance do not provide such an exception and, accordingly,
subject to future amendments, this situation will not change upon continuance.
Shareholder Proposals and Requisitions
The Alberta Act provides that holders of not less than 5% of the voting shares
of the Corporation may submit a proposal with respect to the election of
directors. The Alberta Act also provides that holders of not less than 5% of the
voting shares of the Corporation may requisition the directors to call a meeting
of shareholders. The New Brunswick Act has similar provisions, but the
corresponding threshold is 10% in each instance.
Mandatory Solicitation of Proxies
The Alberta Act provides that a corporation with more than 15 shareholders is
required to send a form of proxy to each shareholder concurrently with giving
notice of a meeting of shareholders. In addition, the Alberta Act provides that
proxies cannot be solicited, either by management of the corporation or
otherwise, without the delivery of either a management proxy circular or a
dissent's proxy circular in prescribed form. The New Brunswick Act does not
contain any provisions relating to the mandatory solicitation of proxies.
However, the Corporation will continue to be subject to the applicable
Securities Laws and Stock Exchange rules, which provide comprehensive
requirements regarding mandatory proxy solicitation. As a result, the
continuance under the New Brunswick Act will not impact upon the Corporation's
current mandatory solicitation requirements.
Investigation of Corporations
Under the Alberta Act any security holder (which includes a shareholder) may
apply to the court for an order directing an investigation to be made of a
corporation and any of its affiliated corporations. Under the New Brunswick Act
such an application can only be made by the holders of not less than 10% of the
outstanding shares of any class of the corporation.
Other than formatting changes and changes to accommodate differences between the
New Brunswick Act and the Alberta Act (for example, the Articles of Continuance
expressly preclude a pre-emptive right), the proposed form of Articles of
Continuance are substantially the same as the Corporation's present Articles
except for one proposed change. At present the Articles of the Corporation
provide that the Corporation shall have a minimum of 3 and a maximum of 9
directors. The proposed Articles of Continuance increase the maximum number of
directors to 20. The form of proposed Articles of Continuance will be tabled at
the Meeting, and will be available for inspection at the registered office of
the Corporation (1310 Merrill Lynch Tower, 10205 - 101 Street, Edmonton,
Alberta, T5J 2Z2) during normal business hours up to and including the date of
the Meeting.
The continuance of the Corporation under the New Brunswick Act requires the
passing of a special resolution. A special resolution is one that is passed by a
majority of not less than two-thirds (2/3) of the votes cast by the shareholders
who voted in respect of that resolution. The form of resolution also authorizes
the directors of the Corporation to not proceed with the continuance, as they
may determine at their discretion, without further approval of the shareholders.
The shareholders will be asked to consider and, if deemed advisable, pass the
following as a special resolution:
"IT BE RESOLVED THAT:
1. The Corporation be continued as a New Brunswick Corporation under the
Business Corporations Act (New Brunswick) and the Corporation apply to the
appropriate official or public body requesting that
<PAGE>
20
the Corporation be continued as if it had been incorporated under the
Business Corporations Act (New Brunswick).
2. The Corporation adopt Articles of Continuance in the form tabled at the
shareholders meeting held December 7, 2000, or in such other form as the
directors, in their discretion, may determine.
3. The directors of the Corporation are authorized to abandon the application
for continuance without further approval of the shareholders.
4. Any officer or director of the Corporation be and is hereby authorized to
do all such things that may be required to give full force and effect to
this resolution including, but not limited to, completing and filing
Articles of Continuance."
Adoption of By-laws
Provided that the shareholders pass the proposed special resolution to continue
the Corporation under the New Brunswick Act, it is proposed that the Corporation
adopt new By-laws in a form customized to reflect and accommodate the New
Brunswick Act, to replace the existing By-laws of the Corporation, which are
customized to accommodate the provisions of the Alberta Act. The adoption of
By-laws requires the approval and ratification of the shareholders of the
Corporation by way of an ordinary resolution. The proposed form of new By-laws
will be tabled at the Meeting and prior thereto will be available for inspection
at the Corporation's registered office (1310 Merrill Lynch Tower, 10205 - 101
Street, Edmonton, Alberta, T5J 2Z2) during normal business hours.
DISSENT RIGHTS
Section 184 of the Alberta Act provides that a holder of shares of a corporation
may dissent if the corporation resolves to be continued under the laws of
another jurisdiction. A dissenting shareholder who complies with Section 184 of
the Alberta Act with respect to continuance of the Corporation under the New
Brunswick Act is entitled to be paid the fair value of the shares in the
Corporation held by such shareholder in respect of which the shareholder
dissents, determined as of the close of business on the last business day before
the day on which the resolution is adopted. A dissenting shareholder may only
claim under Section 184 of the Alberta Act with respect to all of the shares
held by him or on any one beneficial owner and registered in the name of the
dissenting shareholder. In order to dissent, a shareholder must send a written
objection to the special resolution to the Corporation at or before the Meeting.
The execution or exercise of a proxy will not constitute a written objection or
dissent.
The provisions of the Alberta Act setting out the procedures that must be
followed by a dissenting shareholder are complex and, if not strictly followed,
may adversely affect the right of a dissenting shareholder to receive from the
Corporation the fair value of such shareholder's shares. The text of Section 184
of the Alberta Act is attached as a schedule to this Information Circular.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
There were no material interests, direct or indirect, of directors and officers
of the Corporation, any shareholder who beneficially owns more than 10% of the
Common Shares of the Corporation, or any known associate or affiliate of these
persons in any transactions since the commencement of the Corporation's last
fiscal year or in any proposed transaction which has materially affected or
would materially affect the Corporation other than as previously disclosed in
this Information Circular.
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21
OTHER BUSINESS
Management is not aware of any other business to come before the Meeting other
than as set forth in the Notice of Annual and Special Meeting of Shareholders.
If any other business properly comes before the Meeting, it is the intention of
the persons named in the Instrument of Proxy to vote the shares represented
thereby in accordance with their best judgment on such matter.
APPROVAL AND CERTIFICATION
The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in light of the circumstances in which it was
made.
DATED: November 16, 2000
(Signed) "Michael Ridgway" (Signed) "Richard Justice"
MICHAEL B. RIDGWAY RICHARD JUSTICE
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
<PAGE>
Section 184
Business Corporations Act (Alberta)
184(1) Subject to sections 185 and 234, a holder of shares of any class of a
corporation may dissent if the corporation resolves to
(a) amend its articles under section 167 or 168 to add, change or remove
any provisions restricting or constraining the issue or transfer of
shares of that class,
(b) amend its articles under section 167 to add, change or remove any
restrictions on the business or businesses that the corporation may
carry on,
(c) amalgamate with another corporation, otherwise than under section 178
or 180.1,
(d) be continued under the laws of another jurisdiction under section 182,
or
(e) sell, lease or exchange all or substantially all its property under
section 183.
(2) A holder of shares of any class or series of shares entitled to vote under
section 170, other than section 170(1)(a), may dissent if the corporation
resolves to amend its articles in a manner described in that section.
(3) In addition to any other right he may have, but subject to subsection (20),
a shareholder entitled to dissent under this section and who complies with this
section is entitled to be paid by the corporation the fair value of the shares
held by him in respect of which he dissents, determined as of the close of
business on the last business day before the day on which the resolution from
which he dissents was adopted.
(4) A dissenting shareholder may only claim under this section with respect to
all the shares of a class held by him or on behalf of any one beneficial owner
and registered in the name of the dissenting shareholder.
(5) A dissenting shareholder shall send to the corporation a written objection
to a resolution referred to in subsection (1) and (2)
(a) at or before any meeting of shareholders at which the resolution is to
be voted on, or
(b) if the corporation did not send notice to the shareholder of the
purpose of the meeting or of his right to dissent, within a reasonable
time after he learns that the resolution was adopted and of his right
to dissent.
(6) An application may be made to the Court by originating notice after the
adoption of a resolution referred to in subsection (1) or (2)
(a) by the corporation, or
(b) by a shareholder if he has sent an objection to the corporation under
subsection (5),
to fix the fair value in accordance with subsection (3) of the shares of a
shareholder who dissents under this section.
(7) If an application is made under subsection (6), the corporation shall,
unless the Court otherwise orders, send to each dissenting shareholder a written
offer to pay him an amount considered by the directors to be the fair value of
the shares.
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23
(8) Unless the Court otherwise orders, an offer referred to in subsection (7)
shall be sent to each dissenting shareholder
(a) at least 10 days before the date on which the application is
returnable, if the corporation is the applicant, or
(b) within 10 days after the corporation is served with a copy of the
originating notice, if a shareholder is the applicant.
(9) Every offer made under subsection (97) shall
(a) be made on the same terms, and
(b) contain or be accompanied by a statement showing how the fair value
was determined.
(10) A dissenting shareholder may make an agreement with the corporation for the
purchase of his shares by the corporation, in the amount of the corporation's
offer under subsection (7) or otherwise, at any time before the Court pronounces
an order fixing the fair value of the shares.
(11) A dissenting shareholder
(a) is not required to give security for costs in respect of an
application under subsection (6), and
(b) except in special circumstances shall not be required to pay the costs
of the application or appraisal.
(12) In connection with an application under subsection (6), the Court may give
directions for
(a) joining as parties all dissenting shareholders whose shares have not
been purchased by the corporation and for the representation of
dissenting shareholders who, in the opinion of the Court, are in need
of representation,
(b) the trial of issues and interlocutory matters, including pleadings and
examinations for discovery,
(c) the payment to the shareholder of all or part of the sum offered by
the corporation for the shares,
(d) the deposit of the share certificates with the Court or with the
corporation or its transfer agent,
(e) the appointment and payment of independent appraisers, and the
procedures to be followed by them,
(f) the service of documents, and
(g) the burden of proof on the parties.
(13) On an application under subsection (6), the Court shall make an order
(a) fixing the fair value of the shares in accordance with subsection (3)
of all dissenting shareholders who are parties to the application,
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24
(b) giving judgement in that amount against the corporation and in favour
of each of those dissenting shareholders, and
(c) fixing the time within which the corporation must pay that amount to a
shareholder.
(14) On
(a) the action approved by the resolution from which the shareholder
dissents becoming effective,
(b) the making of an agreement under subsection (10) between the
corporation and the dissenting shareholder as to the payment to be
made by the corporation for his shares, whether by the acceptance of
the corporation's offer under subsection (7) or otherwise, or
(c) the pronouncement of an order under subsection (13),
whichever first occurs, the shareholder ceases to have any rights as a
shareholder other than the right to be paid the fair value of his shares in the
amount agreed to between the corporation and the shareholder or in the amount of
the judgement, as the case may be.
(15) Subsection (14)(a) does not apply to a shareholder referred to in
subsection (5)(b).
(16) Until one of the events mentioned in subsection (14) occurs
(a) the shareholder may withdraw his dissent, or
(b) the corporation may rescind the resolution,
and in either event proceedings under this section shall be discontinued.
(17) The Court may in its discretion allow a reasonable rate of interest on the
amount payable to each dissenting shareholder, from the date on which the
shareholder ceases to have any rights as a shareholder by reason of subsection
(14) until the date of payment.
(18) If subsection (2) applies, the corporation shall, within 10 days after
(a) the pronouncement of an order under subsection (13), or
(b) the making of an agreement between the shareholder and the corporation
as to the payment to be made for his shares,
notify each shareholder that it is unable lawfully to pay dissenting
shareholders for their shares.
(19) Notwithstanding that a judgement has been given in favour of a dissenting
shareholder under subsection (13)(b), if subsection (20) applies, the dissenting
shareholder, by written notice delivered to the corporation within 30 days after
receiving the notice under subsection (18), may withdraw his notice of
objection, in which case the corporation is deemed to consent to the withdrawal
and the shareholder is reinstated to his full rights as a shareholder, failing
which he retains a status as a claimant against the corporation, to be paid as
soon as the corporation is lawfully able to do so or, in a liquidation, to be
ranked subordinate to the rights of creditors of the corporation but in priority
to its shareholders.
(20) A corporation shall not make a payment to a dissenting shareholder under
this section if there are
<PAGE>
25
reasonable grounds for believing that
(a) the corporation is or would after the payment be unable to pay its
liabilities as they become due, or
(b) the realizable value of the corporation's assets would thereby be less
than the aggregate of its liabilities.
<PAGE>
BROCKER TECHNOLOGY GROUP LTD.
2150 Tower One, Scotia Place
10060 Jasper Avenue
Edmonton, Alberta
T5J 3R8
INSTRUMENT OF PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT AND WILL BE USED AT THE ANNUAL AND SPECIAL
MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, DECEMBER 7, 2000.
The undersigned shareholder of Brocker Technology Group Ltd. (the
"Corporation"), or his attorney authorized in writing, hereby nominates,
constitutes and appoints Casey O'Byrne, the Chairman of the Corporation, or
failing him, Michael Ridgway, the President of the Corporation, or in the place
and stead of the foregoing, the true
and lawful attorney and proxy of the undersigned to attend, act and vote in
respect of all shares held by the undersigned at the Annual and Special Meeting
of Shareholders of the Corporation, to be held at the W Hotel, 541 Lexington
Avenue, New York, New York, U.S.A., on Thursday, December 7, 2000, at the hour
of 3:00 p.m. (New York time) and any adjournment or adjournments thereof, unless
and until the undersigned is present in person at the meeting or any adjournment
or adjournments thereof, and without limiting the general authorization and
power herein given, to vote on behalf of the undersigned in the following
manner, OR IF NO CHOICE IS SPECIFIED, IN ACCORDANCE WITH HIS DISCRETION:
1. TO VOTE FOR TO WITHHOLD VOTE
---------- ----------
The election of directors as set out in the Corporation's Information
Circular for the ensuing year.
2. TO VOTE FOR TO WITHHOLD AGAINST
---------- ----------
The passing of a resolution to appoint Deloitte Touche Tohmatsu as auditors
for the ensuing year and to authorize the directors to fix the remuneration
of the auditors.
3. TO VOTE FOR TO VOTE AGAINST
---------- ----------
The passing of a resolution to approve the issuance by the Corporation, in
one or more private placements during the twelve month period commencing
December 7, 2000, of such number of securities that would result in the
issuance or making issuable of a number of Common Shares aggregating up to
100% of the number of outstanding Common Shares of the Corporation as at
October 30, 1999 as more particularly described in the Corporation's
Information Circular.
4. TO VOTE FOR TO VOTE AGAINST
---------- ----------
The passing of a resolution to approve the Corporation's Employee Share
Purchase Plan, as more particularly described in the Corporation's
Information Circular.
5. TO VOTE FOR TO VOTE AGAINST
---------- ----------
The passing of a special resolution to continue the Corporation as a New
Brunswick Corporation under the Business Corporations Act (New Brunswick)
and to adopt new By-laws, as more particularly described in the
Corporation's Information Circular.
6. TO VOTE FOR TO VOTE AGAINST
---------- ----------
<PAGE>
The passing of a resolution to ratify and approve the repricing of certain
stock options granted to insiders of the Corporation, as more particularly
described in the Corporation's Information Circular.
7. To vote in accordance with his discretion upon such other business as may
properly come before the Meeting or any adjournment thereof.
THE UNDERSIGNED HEREBY REVOKES ANY PROXIES BEFORE GIVEN.
DATED this day of , 2000.
------- ------------------
-------------------------------------
Signature of Shareholder or his
attorney authorized in writing
PLEASE PRINT:
NAME:
-------------------------------------
NUMBER OF SHARES HELD:
---------------
NOTE: If the shareholder is a company or a corporation, the Instrument of Proxy
should be under its corporate seal and executed by an officer or attorney
thereof duly authorized.
<PAGE>
BROCKER TECHNOLOGY GROUP LTD.
(the "Corporation")
Interim Financial Statements
RETURN CARD - 2000
Under National Policy 41 the Corporation is exempted from delivering Interim
Financial Statements to its registered shareholders if it maintains a
Supplemental Mailing List. Interim Financial Statements will be distributed to
shareholders requesting such material, whose names will appear on the
Supplemental Mailing List.
Accordingly, if you wish to receive the Corporation's Interim Financial
Statements you must complete and sign this card and return it to the
Corporation.
This election must be renewed each year to entitle the shareholder to continue
receiving the Interim Financial Statements of the Corporation.
TO: BROCKER TECHNOLOGY GROUP LTD.
2150 Tower One, Scotia Place
10060 Jasper Avenue
Edmonton, Alberta
T5J 3R8
ATTENTION: SHAREHOLDER COMMUNICATIONS
I hereby request that I be provided with the Interim Financial Statements of the
Corporation. I confirm that I am the owner of shares of the Corporation.
------------------------------ -----------------------------------------
DATE SIGNATURE
-----------------------------------------
NAME
-----------------------------------------
ADDRESS
-----------------------------------------
<PAGE>
Alberta Securities Commission
21st Floor, 10025 Jasper Avenue
Edmonton, Alberta
T5J 3Z5
- and -
British Columbia Securities Commission
1100 - 865 Hornby Street
Vancouver, British Columbia
V6Z 2H4
- and -
Ontario Securities Commission
Suite 700, Box 55
20 Queen Street West
Toronto, Ontario
M5H 3S8
ATTENTION: FILINGS
Dear Sirs:
RE: BROCKER TECHNOLOGY GROUP LTD.
I wish to advise that, based upon our knowledge at this time, we are in
agreement with the information contained in the attached Notice by Brocker
Technology Group Ltd. dated October 18, 2000.
Yours truly,
"DELOITTE TOUCHE TOHMATSU"
<PAGE>
Contents
The Business Opportunity 3
Business to Business 4
Communication Solutions
Brocker Professional Services 5
Brocker Online Services 6
Brocker Vendor
Services Board of Directors 7
Financial Highlights 8
Letter to Shareholders 9-10
Management Report 11-16
Auditor's Report 17
Financial Statements 18-46
Corporate Information 47
